Bush Administration an Ecological Disaster?

[Timber Loftis]

Thorfinn, I certainly agree about pinheads in D.C. deciding about issues in New Mexico - or the potato farmer you mention. But, where we do need the government to limit the potato farmer is when he will do things that can affect us all - like dump coal tar on his potato field, which will ultimately migrate all over town and into the groundwater.

In my model, the shrimpers would pay for the right to *use* a public good (the oceans) and get the spoils of their use. In the instance of an endangered species, they would have to work around it and not harm it. They may not value it, but yes it is their job to value it, and it is the proper role of government to make the value it properly. Real cost accounting. Just because they believe the turtle is worthless does not make it so.

The Smith model does in fact assume perfect knowledge. It assumes that 2 widget-makers, A and B, both know how to make the widget and it limits their struggle to developing efficiency in making the widget. I don't think I am misunderstanding this model. Patents, copyrights, trademarks, and trade secrets are in fact legal derrogations from this model developed to encourage research and development, as the basic Smithian model discourages research and development (because after you input lots of R&D money, everyone gets to reverse engineer your product and get the R&D info on the cheap).

Now, the "capitalism and freedom" model you refer to is unknown to me, and I get the feeling it isn't the same as Smith. Feel free to correct me (like you even need the invitaiton [img]tongue.gif[/img] ) on my understanding of Smith, but his basic model does assume PERFECT KNOWLEDGE.

[Thorfinn]

I don't need the government to protect me from the coal tars some yahoo in New Mexico chooses to dump on his potatoes. (Out of curiousity, why would he do that? It certainly doesn't improve property values, nor the price he gets for his potatoes.) I merely need to be able to recover damages if his actions allow coal tars to leak into my ground water. Then he has infringed on my property rights. I have no need for a governemnt court for that. Any halfway intelligent arbitrator can look at a lab test report showing coal tars in my well, look at my geological survey and investigative evidence of who are the only emitters of coal tars, look at my damages and what it will cost to make me whole, and deal with it. I don't need gov't to stop him from doing it -- I just need a gov't that will not stand in the way of me getting restitution if he does harm me.

But your example of widget makers is not an example of perfect information. On the contrary, neither knows what the other is trying to do to improve the process, neither knows of special niches markets for slightly modified widgets the other may be exploring, and neither needs know anything about manufacturing buggy whips. The whole Smith model is based on division of labor, i.e., you know your job better than I, and vice versa. That is by definition imperfect information.

But to say that the Smith model restrains innovation is contradicted by the pharmaceutical industry. On average, by the time the FDA approves a drug for use, it has fewer than three years left on the patent, not a whole lot of time to recoup the multi-millions spent in complying with FDA requirements, which the generics are able to copy within a handful of years -- enough time to get the kinks worked out of their manufacturing process.

It also ignores the simple fact that the vast majority if improvements in technology are not patented -- corporations instead try to protect themselves by keeping it a trade secret and adding masking agents and products that self-destruct when normal reverse engineering practices are attempted. A tiny bit of reflection should tell why they do that -- countries like India don't respect our patent laws, and Indian companies are immediately able to scale up a process from the patent application, if it is sufficiently detailed. I believe they may have made some concessions to US patent laws in the generic drug area recently, but don't quote me.

[EDIT]
In fact, the Smith model heavily limits megacompanies, which are typically unable to rapidly change the way they do things to accomodate new markets, and greatly favors the small entrepreneurs, who can get into the business fast, and move on to some other venture once the behemoths get their act together. The Smith model, in fact, encourages innovation, since the megacorps are generally situated well for squeezing the last few pennies out of the manufacturing costs, meaning that entrepreneurs have to move into new lucrative areas or go bankrupt.
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[ 04-23-2003, 02:58 PM: Message edited by: Thorfinn ]

[Timber Loftis]

There is a treaty covering patents, and the IP department at any competent firm files patents in most every country that does has patent protection but is not a signatory to the treaty. So, it's simple - file in India.

I cannot respond to your argument that pharmaceutical companies are a fine example of capitalism at work other than to say. . . "Ugh."

[Thorfinn]

No, don't you see? Not even the leviathan that is the Federal Government can suck off enough money for the pharmaceutical companies to stop coming up with new and better stuff. If not for the horrible delay and costs the FDA imposes, drug companies could release stuff at a much more reasonable price, and would have a much longer time to recoup costs before the competitors were able to reverse-engineer and go into competition.

Not even massive waste is enough to kill the incentive for innovation within the Smith model.

Yes, the pharmaceutical industry is a mess, but I contend that the bulk of the mess is actually caused by the government, and further attempts to fix it through the government only exascerbates the problem...

[EDIT]
And don't you see the problem with the "file in India" quip? It can only be done by megacorps. The entrepreneurs don't have the resources to file paperwork in every country and its brother, and bribe the appropriate officials to make sure their patent ends up being processed first. You are condoning a system which gives a significant competitive advantage to BigCo...
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[ 04-23-2003, 03:11 PM: Message edited by: Thorfinn ]

[Thorfinn]

Timber: Real cost accounting. Just because they believe the turtle is worthless does not make it so.

I missed this entirely the first time through. Real cost accounting, huh? Are you paying your fair share for imposing your restrictions on the commonly-held property? (Not you personally -- I understand you are in the top tax bracket -- a figurative you.) If you are imposing restrictions and not paying for those restrictions, how can you say you support Real Cost Accounting^TM?

Just because you think a turtle is worth sacrificing the livelyhood of a shrimper does not make it so.

[ 04-23-2003, 03:24 PM: Message edited by: Thorfinn ]

[Timber Loftis]

The restriction keeps the shrimper from taking things from us all - namely, me. Does he get nets for free? Killing a turtle while making his livelihood is the same as polluting - it takes a public good away from us all. My only restriction is to make you pay for the inputs you use. If you use clean air or turtles or clean water, you ought pay the going rate for them just as you ought pay the going rate for any other input, such as plastic, steel, or labor. We've had this discussion before, Thorfinn. Mine is a usage/consumption/waste tax scheme.

[Edit] I am not sacrificing the livelihood of the shrimper. I am merely making him pay the true cost for what he uses to do business. If he is not efficient enough to pay the true cost and make a profit, his livelihood is forfeit. If this is true of the industry as a whole, it too is forfeit. But, people will always want shrimp, so the price of shrimp just may go up. That, too, is acceptable. If the price was lower before, the windfall of taking a good from the public was being returned in part to the public, but that is an apples-for-oranges tradeoff that's not accurate or fair.

Oh, why restrict the taking of turtles completely? Because the fair "going rate" on an endangered species is so astronomical that to put a price on it would be ludicrous. But, sure, I'll bite. He can "take" all the turtles he wants - at $25,000 a pop (I think that's the fine for violating the Endangered Species Act).

[Final Edit]: While I wish I were in the top tax bracket, I most certainly am not. I'm keeping my fingers crossed, of course.

[ 04-23-2003, 04:01 PM: Message edited by: Timber Loftis ]

[Thorfinn]

Ah. I guess I had not realized you really meant you wanted True Cost Accounting For Some People^TM.

You want to be compensated for the tiny fraction of the amount your share of the public land will be affected if we use the property the way he wants to use it, but do not seem willing to compensate him for the way he will be affected if we use the property the way you want.

Like I said, you are all in favor of True Cost Accounting when you it is not you we are talking about having to open up the checkbook...

[ 04-23-2003, 05:11 PM: Message edited by: Thorfinn ]

[Timber Loftis]

Originally posted by Thorfinn: Ah. I guess I had not realized you really meant you wanted True Cost Accounting For Some PeopleTM.

Excuse me? That's unfair and NOT what I said. Who am I advocating NOT pay the true costs??

{edit] I wrote this before you added an explanation.

[ 04-23-2003, 05:23 PM: Message edited by: Timber Loftis ]

[Timber Loftis]

Originally posted by Thorfinn: You want to be compensated for the tiny fraction of the amount your share of the public land will be affected if we use the property the way he wants to use it, but do not seem willing to compensate him for the way he will be affected if we use the property the way you want.

Untrue. You are asserting I should pay for things to exist at a state of nature. That's just silly. I'm not "using" the property, he is (I don't know which example we're on now, but I'll go with it). In fact I am saying anyone must pay for ANY use that removes/uses/wastes public goods.

Taken to its fullest logical conclusion, you are advocating we compensate people for all limits to their freedoms, including compensate them for the loss of their freedom to harm others. The freedom to harm others is the one freedom we give up under any of these free capitalist philosphies. It's essential to Locke's Second Treatise, and is the one freedom he asks we give up to live in his utopia.

I merely point out that Locke and others in this vein of thinking are dishonest in that they don't consider polluting the air, land, and water as harming others and taking from others.

[Thorfinn]

I believe you are mistaken.

If you, your neighbor and I were to buy a piece of property, intending to rent it out, and we did so for a while, but then the two of you decide to evict the tenants and never rent it out again, using the excuse that you don't want the carpet to get dirty, you would owe me for the amount of the use of the property you stole from me.

This is what we did to the shrimper. He had a livelihood, and was a partial owner of the sea, as are we all. By changing the rules, we have harmed him. We stole the use of the property, changing the agreement without bothering with his consent. At the very least, we owe him a cash payout for the amount he has been damaged.

[EDIT]
And, yes, you are using the property, or at least condoning the way it is being used. You choose to leave it undeveloped, or as a turtle hatchery, or whatever. Others are free to use it concurrently as long as they don't interfere with the way you want it used. Just remember that choosing to save a resource for use at a later date, or not at all is just as much of a use as commercially exploiting the the property.
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[ 04-23-2003, 05:56 PM: Message edited by: Thorfinn ]